U.S. online spending rose nearly 9% during the 2024 holiday season as shoppers increasingly bought products like TVs and Lego sets on their smartphones, Adobe Analytics data showed Tuesday.
Online holiday spending from Nov. 1 to Dec. 31 rose 8.7% to about $241.4 billion, exceeding Adobe's initial forecast of $240.8 billion in September. In 2023, online spending increased by 4.9% over the same period.
Retailers like Walmart and Target increased advertising spending, offered early bird discounts and targeted promotions, and used artificial intelligence to boost sales during the short holiday season and attract bargain-hungry customers.
But Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said the larger-than-expected surge in online spending may not translate into profits for retailers.
Walmart, Target, Macy's and other major retailers won't report their full holiday results until later this winter.
“We're a little nervous heading into earnings season to see if big profits online will translate into big profits for retailers,” Jacobsen said, adding that the discounts that boosted sales could weigh on margins. he added.
According to Adobe, 54.5% of online shopping transactions were made through smartphones this holiday season, compared to 51.1% during the same period in 2023.
“The 2024 holiday season showed that e-commerce is being reshaped by consumers who prefer to transact on small screens and rely on AI-powered services to shop more efficiently. '' said Vivek Pandya, Principal Analyst at Adobe Digital Insights.
According to Adobe, increased reliance on AI-powered chatbots such as Amazon's Rufus for product recommendations and shopping assistance has increased customer traffic to retail sites by 1,300%. Adobe monitors online transactions across websites and tracks e-commerce with access to 85% of data. Ranked among the top 100 Internet retailers in the United States.
Salesforce data also showed that AI-powered chatbots and other shopping features will help consumers buy and return items during the 2024 holiday season.
Convenient shopping and free shipping options, as well as flexible payment methods such as buy later, pay later (BNPL) services, also captured the attention of price-sensitive customers, Adobe said.
In 2024 holiday shopping, BNPL accounted for $18.2 billion in online spending, an increase of 9.6% from the previous season.
